Specified method is not supported, iis 7.5 win 2008 r2

I ahve a code that was working just fine on iis7 windows 2008 32 bit but on iis7.5 i get below error every now and than. It looks like it is due to client disconnect but never had this error on old setup and there were client disconnect errors. It happens usually with simple post requests. I don't understand why system.drawing throws error. although some of those post requests are multi-part file/image uploads, most of them simple form posts.

Any one seen something like that?

 System.Web.HttpUnhandledException: Exception of type 'System.Web.HttpUnhandledException' was thrown. ---> System.Web.HttpException: An error occurred while communicating with the remote host. The error code is 0x800703E3. ---> System.NotSupportedException: Specified method is not supported.
   at System.Web.HttpResponseStream.get_Position()
   at System.Drawing.UnsafeNativeMethods.ComStreamFromDataStream.Seek(Int64 offset, Int32 origin)
   --- End of inner exception stack trace ---
   at System.Web.Hosting.IIS7WorkerRequest.RaiseCommunicationError(Int32 result, Boolean throwOnDisconnect)
   at System.Web.Hosting.IIS7WorkerRequest.ReadEntityCoreSync(Byte[] buffer, Int32 offset, Int32 size)
   at System.Web.HttpRequest.GetEntireRawContent()
   at System.Web.HttpRequest.FillInFormCollection()
   at System.Web.HttpRequest.get_Form()
   at System.Web.HttpRequest.get_HasForm()
   at System.Web.UI.Page.GetCollectionBasedOnMethod(Boolean dontReturnNull)
   at System.Web.UI.Page.DeterminePostBackMode()
   at System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint)
   --- End of inner exception stack trace ---
   at System.Web.UI.Page.HandleError(Exception e)
   at System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint)
   at System.Web.UI.Page.ProcessRequest(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint)
   at System.Web.UI.Page.ProcessRequest()
   at System.Web.UI.Page.ProcessRequest(HttpContext context)
   at ASP.mobile_chat_aspx.ProcessRequest(HttpContext context)
   at System.Web.HttpApplication.CallHandlerExecutionStep.System.Web.HttpApplication.IExecutionStep.Execute()
  at System.Web.HttpApplication.ExecuteStep(IExecutionStep step, Boolean& completedSynchronously)